F1 vs NASCAR | Pedal to the Metal | 2

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0:20It's October 16th, 1997 at 10 Downing Street, London. Rain taps softly against the windows of a drawing room. Inside, a small group huddles around a polished table. Prime Minister Tony Blair leans back in his armchair, sleeves rolled slightly above the cuffs. He's only five months into the job, but he already looks comfortable in the role. Opposite him sit two men who, in their own world, wield as much influence as any prime minister. Motorsport power brokers Bernie Eccleston and Max Mosley. 66-year-old Eccleston is small, quiet, and almost motionless, but the intensity in his eyes suggests a man accustomed to getting what he wants.

1:05Still, it's his ally Mosley who does most of the talking. The problem is the European Union. Prime Minister Blair smiles faintly. You won't believe how often I hear that. Mosley doesn't return the smile. The European Commission's draft directive would completely ban tobacco advertising in sport. If it goes through as written, Formula One will lose the majority of its sponsorship income overnight. Well, how much are we talking here? 150 million pounds every season, Eccleston cuts in. Prime Minister, F1 contributes 900 million pounds a year to British exports. If the tobacco money goes, those exports could be lost.

1:48Well, why can't the teams just find other sponsors? They could, just not at the same price. Mosley nods in agreement. F1 is one of the last truly global platforms the cigarette companies still have. That's why they pay a premium. But if Europe pulls the plug, we'll be forced to go where the money is. Meaning? We'll have to race in markets without those restrictions. East Asia, the Middle East. Oh, you're saying you'd leave Europe? Well, we'd have no choice. And that will hurt the British economy. Most of the teams are based here in Britain, and they provide 50 ,000 high-skill jobs, plus thousands more part-time jobs.

2:30If the sport does move east, those jobs will go with it. The room falls quiet. Blair taps a finger lightly against the arm of his chair, then turns to Eccleston. So what exactly are you asking? Mosley answers before Eccleston can speak. We're asking you to recognize the economic reality. Eccleston remains silent. He doesn't need to say anything, because everyone in the room understands the deeper context. Months earlier, Eccleston donated one million pounds to Blair's re-election campaign. Now, he seems to expect something in return. Blair stands, bringing the meeting to a close. Well, thank you for coming in.

3:13We recognize the problems and we'll think about what you've said. The following day, the Prime Minister quietly instructs his ministers to find a way to exempt Formula One from the proposed ban on tobacco advertising. Two months later, the European Directive passes with one exception, Formula One. In the media, questions swirl about whether Eccleston bought influence with Britain's new government. Or whatever the politics looks like, Eccleston got the outcome he wanted. Tobacco money continues to flow into Formula One. Once again, Eccleston has stitched together a solution. but the business of Formula One is becoming increasingly tangled, held together mostly by his personal deal-making.

4:04It works, for now, but the entire empire depends on one man, and all that could unravel the moment Eccleston is no longer there to hold it together. And that moment may come sooner than he thinks.

4:30From Audible Originals, I'm David Brown, and this is Business Wars.

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6:41In the last episode, two motorsport empires emerged on opposite sides of the Atlantic. In the United States, NASCAR grew out of southern bootleggers outrunning the law with trunks full of illegal alcohol. That soon became the nation's biggest motorsport. But in Europe, another iconic championship was taking shape. And at the center of it was Bernie Eccleston, a former used car salesman who rose from team owner to the undisputed power broker of Formula One. He transformed the sport from a loose collection of European races into a global spectacle that tours the world. Now, as the 21st century approaches, the paths of NASCAR and Formula One are about to diverge.

7:30Racing is more global than ever. The media landscape is changing, and the tobacco money that fueled motorsports for decades is under threat. To survive these challenges, the two sports will pursue very different strategies. This is Episode 2, Pedal to the Metal.

7:57It's the late 1990s, in a quiet wood-paneled office in London. Bernie Eccleston sinks into a deep leather armchair, his small frame almost swallowed by it. Across from him, his lawyer's desk is buried beneath papers. It's a familiar setting. Over the past few years, Eccleston has kept his legal advisors busy. But today feels different. He's now in his mid-60s, and the strain of running Formula One is beginning to show. Doctors warn that the relentless pace of travel, negotiations, and race weekends is taking a toll on his health, and in particular, on his heart. Surgeons have told him he needs major surgery, and that started Eccleston thinking about something he's rarely had to confront before, his own mortality.

8:47Across the room, the lawyer flips through a document then clears his throat. He has more bad news to deliver. If Eccleston were to die suddenly, his fortune would be subject to British inheritance taxes. The bill could be enormous, forcing his family to sell the business he spent decades building. With his lawyer's warning ringing in his ears and the clock ticking, Eccleston starts looking for a way to ensure that his fortune goes to his family, not the government. His solution is to float his Formula One assets on the stock market. Over the years, Eccleston has constructed a web of companies collectively known as the Formula One Group.

9:33Together, they control the sport's commercial rights, television deals, race contracts, sponsorship arrangements. Eccleston believes the whole operation could be worth as much as$4 billion. To unlock that value, he partners with investment bank Salomon Brothers to prepare an initial public offering. But almost immediately, he runs into a problem. The stock market doesn't operate like Formula One. Eccleston shuns detailed contracts. He prefers quick negotiations and verbal understandings. And this vagueness is a deliberate strategy. By leaving deals slightly undefined, teams, race promoters, and broadcasters can never quite pin him down.

10:21No one is ever entirely sure where they stand. And that uncertainty usually gives Eccleston the upper hand. But now that ambiguity is working against him. The Formula One Group is a sprawling web of entities across multiple jurisdictions built on fuzzy deals. Salomon Brothers can't even fully map the business. And without clear ownership, the bankers struggle to put a price on what investors might actually be buying. With the IPO stalling and Eccleston wanting a quicker solution, he pivots. Instead of selling shares to the public, he looks for another way to unlock the value of the business and get cash in hand now, before he dies and the tax bill comes due.

11:09He turns to Robin Saunders, an American financier based in London. Together, they pursue a different strategy. A massive debt deal. The plan is to sell bonds to banks using Formula One's future earnings as collateral. Investors lend money now and get repaid with interest over time. When negotiations conclude, the banks are willing to lend$1.4 billion. But they add a crucial condition. The entire deal depends on Eccleston continuing to run Formula One. The trouble is, he hasn't been entirely honest about how long that might be.

11:57It's late May 1999 in London, England. Morning light spills through the tall windows of a high-rise office. On the desk sits a half-empty champagne bottle, a smattering of glasses and a thick binder labeled Formula One Group Bond Offering. Financier Robin Saunders stands by the window rubbing her temples. After nearly two years of negotiations, Several banks have now agreed to lend$1.4 billion against the future revenues of Formula One. The bonds are sold. The paperwork is signed. But Eccleston didn't show up to the celebration last night, which is strange. He never misses the chance to take a victory lap.

12:45Saunders reaches across her desk and picks up the phone. Robin Saunders. A familiar voice answers. Good morning, Robin. Bernie, I was wondering where you disappeared to last night. I was busy. You see, Robin, I've been really naughty. What do you mean, naughty? I, uh, I didn't quite tell the whole truth about my health. Saunders feels a chill creep down her spine. What do you mean, you didn't tell the whole truth? I have to have a triple heart bypass. You what? I'm having heart surgery. When? Two o 'clock. Today. The day after the bond sale. And you didn't think to mention this before. Saunders stares at the floor, her mind racing.

13:36The banks bought more than a billion dollars of bonds on one key assumption, that Eccleston would still be around to run Formula One. If he dies on the operating table, the entire deal could unravel. The banks will want answers, lawsuits will rain down, and her career will be shredded. Bernie, you assured me you were in good health. I am, mostly. I just thought it might complicate things if I mentioned it earlier. Saunders closes her eyes. Of course he did. For Eccleston, information is power. But his keeping silent on this could destroy everything. She inhales deeply, forcing herself to stay calm.

14:22Bernie? Yes? I hope the surgery goes well. But know this. If you make it out alive, I'm going to kill you myself.

14:35To Saunders' relief, the surgery goes off without a hitch. Eccleston wastes little time getting back to work. And with his heart and tax troubles behind him, he sets out to make Formula One even bigger. By the turn of the 21st century, the F1 championship calendar has 17 races that are mostly concentrated in Europe. For many observers, this already feels like a full schedule. But Eccleston disagrees. More races means more revenue. and with the United States proving resistant to Formula One, he starts looking for growth elsewhere, like the rapidly growing economies in Asia and the oil-rich nations of the Middle East.

15:21The governments of these regions are eager to raise their international profile. Hosting a Grand Prix would do exactly that. And for autocratic regimes facing criticism over their human rights records, a Formula One race would also serve as a powerful public relations opportunity. Eccleston understands this dynamic and intends to profit from it. Because unlike Formula One's historic European circuits, which are often run by cash-strapped local promoters, the new hosts are willing to pay enormous fees for the privilege of staging a race.

16:04It's the early 2000s, and Eccleston is, not for the first time in his life, meeting with royalty. Across from him is a tall man in a white robe and red-checkered headdress, Salman bin Hamad al-Khalifa, the crown prince of Bahrain. The prince leans forward, eyes fixed on Eccleston. Bernie, I want Formula One in Bahrain. Eccleston gives a polite smile. Well, that's wonderful, Your Highness, of course, but I'm sure you're not the only one. Lebanon, Dubai, and Egypt are interested too. I know, but Bahrain will do it properly. It's an expensive proposition. We're prepared to pay more than$30 million a year, and we will cover the costs of flying in the teams and all the technical equipment.

16:51Eccleston raises an eyebrow. That's serious money. Still, he shakes his head slightly. I don't doubt you have the financial resources, but you don't have a track. Then we will build one. Where exactly? In the desert. You're talking more than a hundred million dollars there. The prince nods as if discussing the price of lunch. That's acceptable. Eccleston strokes his chin thoughtfully. You do understand that if Bahrain joins the calendar, others in the regions will want the same, hmm? That's exactly why we must move first. Eccleston studies him for a moment, weighing the numbers and the implications of the deal.

17:34Finally, he extends his hand. All right, it's a deal.

17:44Bahrain is only the beginning of Formula One's advance east. Across Asia, more governments line up with offers that are hard for Eccleston to refuse. Among them is China, which wants the prestige of hosting a Grand Prix in Shanghai. China's proposal closely matches Bahrain's. a hosting fee of around$30 million per race, plus the full cost of constructing a brand new circuit and staging the event. In 2004, both Bahrain and China joined the championship calendar. No expense is spared. At the newly built Bahrain International Circuit, there's an enormous permanent paddock, eliminating the need for teams to ship their motorhomes halfway around the world.

18:30The high-grip racing surface is meticulously engineered from stone, imported from England. The Bahrainis even spray the surrounding dunes with a sticky adhesive to prevent sand from blowing onto the track. When the races finally begin, though, the grandstands aren't packed. In both Bahrain and Shanghai, thousands of seats sit empty. But Eccleston isn't worried. He believes these countries represent the future of the global economy. Their middle classes are growing and their cities are expanding. By bringing Formula One to these markets early, Eccleston is planting the sports flag there before its rivals.

19:11This is a very different strategy from the one being used by another giant racing series across the pond. Because while Formula One is charging ahead internationally, In the United States, NASCAR is beginning to wobble after decades of booming popularity. Stock car racing is barreling toward a crisis.

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21:52It's February 2001, just over three years before Formula One's debut race in Bahrain, and the crowds watching the Daytona 500 are in shock. For years, Dale Earnhardt Sr. has been NASCAR's defining figure, a seven-time champion with 76 NASCAR Cup race wins across four decades. To millions of fans, Dale Earnhardt Sr. is NASCAR, tough, fearless, and deeply connected to the sport's blue-collar roots. But while battling for the podium, Earnhardt was caught in a three-car crash on the final turn. Now, his car sits surrounded by safety crews as ambulances race towards the scene. and it's clear something is terribly wrong.

22:40A short time later, NASCAR announces that Earnhardt is dead. His death leaves a hole that's impossible to fill. Earnhardt wasn't just any driver. He was NASCAR's biggest star. Two years later, Earnhardt's son, Dale Earnhardt Jr., finishes third in the standings, offering fans a familiar name at the top of the leaderboard. But the championship itself feels anticlimactic. Matt Kenseth cruises to the title despite only winning one race out of 36. His steady run of top 10 finishes built a lead so commanding that the last few races barely mattered. Fans lose interest, and television viewership drops by 22%.

23:28You know, the points system is becoming a problem for NASCAR, but it didn't fail overnight. This is what happens when a business confuses a star for a system. NASCAR's growth had been fueled in large part by a single larger-than-life figure. Dale Earnhardt gave NASCAR its identity and its edge. But with Earnhardt gone, the weakness in NASCAR's point system is completely exposed. Sponsors soon notice the drop in viewership. After 30 years, tobacco giant R.J. Reynolds ends its deal to name the championship after its cigarette brand, Winston. After a hurried search, wireless operator Nextel steps in as the new title sponsor.

24:13But with ratings sliding and corporate partners growing nervous, NASCAR needs something more dramatic than a new championship sponsor. The task falls to newly installed CEO Brian Franz, grandson of NASCAR founder Bill Franz Sr. Within weeks of taking the top job, he implements the biggest change to the sport in decades, the chase for the cup. The new format moves the sport toward an end-of-season playoff system similar to the NFL or the NBA. Drivers spend the first part of the season battling to qualify for the chase. Then the championship is decided over the final 10 races. Suddenly, every race matters again.

25:01The chase promises drama right through to the final lap. And that should keep fans watching until the end of the season. The impact of the chase is immediate. In its first year, five drivers head into the final race with a chance to win the championship. Millions tune in to see who takes the title, producing a 47 % increase in viewership. With the chase restoring excitement to NASCAR's core product, France turns to a second challenge, growth. For decades, NASCAR has been an all-American sport. Drivers have traveled abroad for occasional exhibition races, but the NASCAR Cup has been a strictly U.S.

25:43affair. Still, France can't ignore what's happening elsewhere. Across the globe, Formula One is pushing aggressively into new markets. France begins to wonder whether stock car racing should follow, which creates a dilemma. NASCAR is deeply tied to U.S. culture. Taking it abroad risks shattering that carefully constructed image. So France finds a middle ground. He partners with a Mexican entertainment giant to launch NASCAR Mexico. Although the series bears NASCAR branding, it's run independently from the US competition, with almost exclusively Mexican drivers and teams. Three years later, NASCAR purchases a Canadian stock car series and also rebrands it with the NASCAR name.